FeeX: Destroy Hidden Fees with Uri Levine - a podcast by ListenMoneyMatters.com | Andrew Fiebert and Matt Giovanisci

We are anti-fee at LMM whether they be bank fees, credit card fees, or investing fees. Uri Levine from FeeX joins us to discuss avoiding investing fees.
 You probably go out of your way to avoid having to pay a $3 ATM fee but you might be losing much, much more than a few dollars through investing fees. Americans pay $600 billion in investing fees every year. That is 4% of the Gross Domestic Product! On an individual basis, you lose about one third of your retirement money to these fees over time.
 Types Of Fees
 Expense Ratio: This fee is charged for mutual funds, ETF’s and no-load funds.  Expense ratio is what it costs an investment company to operate a mutual fund. Expense ratio is determined by a yearly calculation. The fund’s operating expenses are divided by the average dollar value of its assets under management. Operating expenses are taken out of a fund’s assets and lower the return to a fund’s investors.
 Plan Fee: If you have a 401(k), the provider may be charging you a plan fee for the privilege of holding your money. Your bank is already doing that!
 Advisory Fee: If you use a financial advisor, you’ll be charged a percentage fee. This is often negotiable.
 Real Dollars
 You might know what percentage you are paying but how much is that in real dollars? The average actively managed fund charges 1.25%. That doesn’t sound like much but over time, it adds up.
It adds up to a lot. If you invest $100,000 in a fund with a 1% annual fee, which is less than average, it will cost you nearly $28,000 over twenty years, according to Securities and Exchange Commission calculations. If you had that $28,000 to invest, you would have earned another $12,000.
How To Pay Fewer Fees
Tailored investing advice is expensive. It might seem like paying a “highly trained expert” would guarantee higher returns than all those slobs who can’t afford an advisor are getting but a big chunk of those returns will be eaten up by fees and commissions.
Under 1% is a good percentage to look for and you’ll find fees that low and lower with Index Funds and ETF’s. The average traditional index fund has a fee of 0.74% and the average ETF fee is 0.44%. Vanguard’s lowest fee fund is the Vanguard 500. The fee is 0.17%. Betterment charges a fee of 0.35% on the first $10,000 invested.
If you’re choosing funds through your employer, it’s likely that no one in your HR department is an expert investment advisor so don’t count on them to explain the fees to you or even know what you’re talking about.
Read the prospectus of each choice. That’s where you’ll find information about the fees charged. If you don’t like what you see, do some research on your own to find a fund with better fees and suggest it be included in the choices.
FeeX
As the saying goes, if you want something done right, or in the case, fairly, you’ll have to do it yourself. Uri was once charged thousands of dollars in fees on a retirement account. After lots of phone calls and time wasted on hold, he got the fees waived. But it made him wonder how many other people were being charged fees and if they were even aware of it.
So he did the only logical thing; started a company to help root out those hidden fees and find alternatives. That’s when FeeX was born.
FeeX will analyze your investments to uncover where you are paying fees and how much you’re paying. They will then find you cheaper alternatives with the same asset allocation.
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